Most Americans think now is not a good time to buy a house. Plus, most Americans think home prices will remain stable for 12 months but that interest rates will increase.
Homebuyer Sentiment Drops to New Low
Fannie Mae’s latest monthly telephone survey of 1,000 homeowners and renters indicated that now was NOT a good time to buy a house. Only 28%, down from 32% in June, thought that now was a good time to buy so obviously, a whopping 72% thought that now was simply not the time to buy a house. In fact, March 2021 was the last time that the majority of survey respondents, 53%, thought that now was a good time to buy a house.
Lack of Affordability Pervasive
With scarce listings and soaring prices, the lack of affordability for all houses was particularly impacting Americans ages 35-44 and middle-to-higher income buyers, according to Fannie’s chief economist, Doug Duncan.
Duncan said, “Historically, prime home buying groups appear to be increasingly sensitive to the lack of affordability, as home prices continue to increase and homes for sale continue to be in short supply…all surveyed consumer segments have reported increased pessimism toward home buying conditions in the past several months.
Drop in Interest Rates Washed Out by Higher Prices
Even a drop in interest rates during July did not “encourage” buyers to buy. For the week ending July 30, purchase loan applications dropped -2% from the week prior and -18% y/y, according to the Mortgage Bankers Association (MBA) Weekly Mortgage Applications Survey.
Good Time to Sell?
Despite Duncan being generally optimistic about sellers’ sentiments remaining high and above pre-pandemic levels, the percentage of survey respondents who said now was a bad time to sell a house increased for the first time since February. Only 20% of survey respondents said that now was a bad time to sell BUT, those who thought it was a good time to sell dropped to 55% in August from July’s high of 77%.
Thanks to Fannie Mae and Mortgage Bankers Association.